please include step by step process in how to solve 44 Divid

please include step by step process in how to solve

44. Dividends on preferred stock. In each of the following independent cases, it is assumed that the corporation has $600,000 of6% preferred stock and $2.400,000 of cornmon stock outstanding, each having a par value of $10, No dividends have been declared for 2011 and 2012. As of 1231/13, it is desired to distribute $250,000 in dividends. How much will the preferred stockholders receive if their stock is curnulative and nonparticipating? (a) (b) As of 1231/13, it is desired to distribute $600,000 in dividends. How much will the preferred stockholders receive ?ftheir stock is cumulative and participating up to 1 1% in total? (c) On 1231/13, the preferred stockholders received a $180,000 dividend on their stock which is cumulative and fully participaing, How much moncy was distributed in total for dividends during 2013?

Solution

a Dividend for 2011 600000*6%          36,000.00 Dividend for 2012 600000*6%          36,000.00 Dividend for 2013 600000*6%          36,000.00 Total preference Dividend        108,000.00 b Amount Dividend to be Distributed        600,000.00 Normal Preference Dividend(600000*6%*3)     (108,000.00) Balance Available        492,000.00 Normal Equity Dividend(108000/60000*240000)     (432,000.00) Total Additional to be distributed          60,000.00 Additional Distribution to Preference(60000*11%)            6,600.00 Total Preference Dividend(108000+6600)        114,600.00 c Total Prefered stcokholders Dividend     180,000.00 Normal Preference Dividend(600000*6%*3) (108,000.00) Additional Distribution to Preference        72,000.00 Additional Distribution to Preference per Share(72000/60000)                  1.20 Normal Common Stock Dividend(108000/60000*240000)     432,000.00 Additional Common Stock Dividend(1.20*240000)     288,000.00 Total Dividend(180000+288000+432000)     900,000.00